The housing crisis continues to have a negative impact on the economy. Now high rents and a lack of decent rental properties in London are affecting companies trying to recruit or even retain staff. The latest CBI/CBRE London Business Survey shows 66% of people surveyed said that availability of properties and housing costs are having an impact on recruiting entry-level staff. This is a record high for the survey and an increase on the 57% who felt the same way when the question was asked in a previous survey in September 2015.
It is also causing problems with recruiting staff at management levels, with 59% of firms saying the housing shortage is affecting their ability to recruit middle management staff, and 22% feeling the same way about recruiting staff at a senior level. To compensate, 44% of firms are paying premium salaries in order to recruit or even hold on to staff. Furthermore, 28% said that staff were leaving their jobs because they could no longer to afford to live in the area. The future is not looking any brighter either, with 62% not believing the housing market will improve in the next three years. CBI London director, Eddie Curzon, said the housing shortage in the capital is a ticking time bomb. Businesses are finding that they are priced out of the market because of the problems in recruiting and retaining staff at all levels.
Plans are in place to improve rail links and build new homes, but it looks as though this is not enough and not happening quickly enough. The problem that London faces today will have a knock-on effect. Workers in the capital will start moving further afield, pushing the commuter belt further back from the city centre, increasing demand for housing and putting up prices in commuter towns too. Studies suggest that the problem could soon expand to other cities. Property adviser, JLL, has already warned that Manchester city centre properties are out of the price range for young professionals who are moving to the suburbs for more affordable accommodation. Key workers such as nurses and teachers are also finding it nigh-on impossible to live in central areas.
This crisis has been talked about for years. Whilst the government talks about providing affordable accommodation in city centres and within large new developments, in reality the progress is too slow to make a difference.
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